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Could a New Kind of Fuel Tax Help Break the Senate Climate Deadlock?

Even before the Senate environment panel pushed through a GOP protest to approve
its climate change bill, Sens. Lindsey Graham (R-SC), Joe Lieberman
(I-CT), and John Kerry (D-MA) were working behind the scenes on a
so-called "tripartisan" plan that can win enough votes in Congress’ upper chamber to make nationwide emissions cuts a reality.

Kerry_Lieberman_Graham_Hold_Press_Conference_XOA0hQd5O1Kl.jpg(from left) Sens. Lindsey Graham (R-SC), Joe Lieberman (I-CT), and John Kerry (D-MA) (Photo: Getty Images)

Over the weekend, the first hints of the trio’s potential strategy were revealed to The Washington Post — and new pricing for transportation fuel could play a major role (emphasis mine):

According to several sources familiar with the process, the lawmakers
are looking at cutting the nation’s greenhouse gas output by targeting,
in separate ways, three major sources of emissions: electric utilities,
transportation and industry.

Power plants would face an overall cap on emissions that would
become more stringent over time; motor fuel may be subject to a carbon
tax whose proceeds could help electrify the U.S. transportation sector
;
and industrial facilities would be exempted from a cap on emissions for
several years before it is phased in.

The concept of an across-the-board tax on fossil fuels used for transport is not new. Exxon CEO Rex Tillerson backed it in October, aligning his company with the stance of some environmental groups and causing debate over his motivations.

But
Tillerson’s endorsement proposed rebating a carbon tax back to
consumers rather than letting it "becom[e] a revenue stream for other
purposes," making it far from clear whether the three senators could
win support for giving more new money to electrified transportation.
(By way of context, electric cars received more funding in the first six months of the Obama administration than the Federal Transit Administration’s annual budget.)

Physicist Joseph Romm, who blogs on every twist of the climate debate for the Center for American Progress, described
the Post story as a "trial balloon" for the senators’ plan and warned
that the end of the cap-and-trade concept would hardly silence critics
who are working to re-brand emissions caps as a closet "gas tax":

Read more…

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Obama Adviser: If EPA is Blocked on Emissions, Forget About CAFE Deal

Environmental Protection Agency (EPA) chief Lisa Jackson extended an olive branch
this week to lawmakers who are pushing to block her from regulating
carbon emissions in the absence of a congressional climate bill, but
Jackson’s promise to delay action until next year appears to have made no headway with Republicans and coal-state Democrats. 

carol_browner_obama_photo1.jpgCarol Browner, at right, with the president. (Photo: TreeHugger)

If Congress succeeds in blocking the EPA from following through on a Supreme Court mandate
to regulate emissions, a legislative path to nationwide pollution
limits would effectively become the sole means for the Obama
administration to follow through on commitments it made at last year’s Copenhagen climate summit.

But White House climate adviser Carol Browner
noted today that a congressional block on the EPA’s authority would
have a second wave of consequences for transportation policy — it
would jettison the Obama administration’s much-heralded deal to raise auto fuel-efficiency standards to 35.5 mile per gallon by 2016.

"I
don’t know why members [of Congress] would want to go out and vote
against the science of climate change," Browner told attendees at a
climate conference sponsored by The New Republic.

Without EPA
authority to regulate emissions under the Clean Air Act, she explained,
"there is no car rule" — referring to the agreement to adopt
California’s landmark efficiency standards as a national model.

"If
the car rule were not to go forward, California would still have all
its authorities," Browner added, meaning that the auto industry’s fears
of compliance with a "patchwork" of regional fuel standards would become a reality.

Browner’s
comments came as climate legislation continues to lose momentum in the
Senate, giving more political ammunition to lawmakers and industry
representatives who seek to stall the process.

Yet Sen. John Kerry (D-MA), one of three negotiators working on a "tri-partisan" climate deal in the upper chamber, took a notably upbeat tone today on the prospects for action this year, and Browner concurred with Kerry’s sentiment.

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The White House Transportation Budget: What’s In Line for the Axe?

In a fiscal year 2011 budget that proposes to increase spending on several core transportation
priorities, the White House also aims to eliminate a few
infrastructure programs that may prove popular with lawmakers.

KCH_1.jpgSen.
Robert Byrd (D-WV) used the STP program to earmark millions of dollars
for road projects in his home state, including the above "King Coal
Highway." (Photo: MCRA of WV)

Among the budget items slated for elimination are a $10 million fund
aimed at helping cities and towns adapt to climate change, $34 million in
rail line relocation grants — which, the White House noted, is siphoned off by
congressional earmarking rather than a merit-based process — and a $12
million inter-city bus security program that was unsuccessfully
targeted in last year’s budget.

But
the largest proposed funding cut under the U.S. DOT’s
purview is
the Surface Transportation Priorities (STP)
program, which distributed $293 million last year to an array of local
road, bridge, and trail projects earmarked by members of Congress.

The
STP program is "not subject to merit-based criteria or competition; nor
are states or localities given the flexibility to target them to their
highest transportation priorities," the White House wrote in explaining
its bid to zero out the spending.

Eliminating STP funding
(which the Obama administration proposed to do in its budget for the
current fiscal year) is likely to prove a heavy lift with lawmakers who
depend on politically valuable transportation earmarks to win favor
with voters. The program is a longtime favorite of road-building
stalwarts such as former Senate Appropriations Committee Chairman
Robert Byrd (D-WV), who earmarked more than $20 million in STP money
for West Virginia roads in 2008 alone.

However, STP
money has also benefited clean transportation projects that might not
otherwise have secured federal aid. In recent years, lawmakers have
steered program funds to build a trail along Connecticut’s Quinnipiac
River ($1.4 million), conduct a seismic retrofit of San Francisco’s
Golden Gate Bridge ($1.9 million), and build new parks in Louisville, Kentucky ($5.8 million in 2008, courtesy of Senate GOP Leader Mitch McConnell).

Will
the administration succeed in its latest effort to slim down
congressional transportation earmarking? The first clues are likely to
emerge later this month and next month, when Transportation Secretary
LaHood and other U.S. DOT officials begin their rounds of testimony on
Capitol Hill.

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EPA Strengthens Nitrogen Dioxide Rules for First Time in 35 Years

The Environmental Protection Agency (EPA) today announced
a new "one-hour standard" aimed at limiting Americans’ short-term
exposure to nitrogen dioxide (NO2), a pollutant created by cars, power
plants, and other industrial sources.

US_regulate_national_auto_emissions.jpg(Photo: TreeHugger)

NO2,
a main ingredient in smog, is linked to adverse
respiratory health effects such as chronic asthma. In creating a new
one-hour NO2 exposure limit of 100 parts per billion (ppb), the EPA
noted that the risk of short-term NOX exposure is particularly acute
near major highways.

As EPA chief Lisa Jackson said in a statement:

This new one-hour standard is designed to
protect the air we breathe and reduce health threats for millions of
Americans. For the first time ever, we are working to prevent
short-term exposures in high risk NO2 zones like urban communities and
areas near roadways. Improving air quality is a top priority for this
EPA. We’re moving
into the clean, sustainable economy of the 21st century, defined by
expanded innovation, stronger pollution standards and healthier
communities.

The rule will be enforced by setting up monitors near roads in areas
with more than 500,000 residents, according to the agency, with a
deadline of 2013 for the beginning of pollutant tracking. The EPA said
it plans to work directly on 40 new monitors for cities and towns with
the most significant NO2 exposure.

It’s worth noting, however, that major cities have remained out of
compliance with EPA air-quality standards for years without
losing
significant amounts of federal highway money, as the federal
government often threatens. Moreover, the EPA has not changed the
current annual NO2 standard of 53 ppb.

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The MA Senate Race: Consequences for Transport and Climate Policy

Democrats awoke this morning to find their worst fears realized,
as lackluster Senate hopeful Martha Coakley (D-MA) was upset by
Republican Scott Brown. Voters, lawmakers, and advocates are left to
wonder what becomes of their issues in a year already marked by
political upheaval.

brown_victory.jpgSen.-elect Scott Brown (R-MA), with his family on election night. (Photo: Globe)

On the transportation front, Brown’s election is unlikely to make passage of a new six-year bill any more difficult than it already is, with Democrats still in search of a way to finance the $450 billion-plus legislation many of them envision.

Brown ran as a critic of the gas tax increase floated early last year
by Democratic Gov. Deval Patrick (MA) to help close the state’s
transportation budget gap. As Brown’s campaign gained momentum in
recent weeks, however, he found himself taking fire from Democrats for voting in favor of a budget that merely preserved, rather than raised, an existing state fuel tax.

The
exchange underscores the conundrum that continues to stall a
reform-minded federal transport bill, whether Brown would vote yes or
not: Democrats have little appetite to find a way to pay for it.

The
Senate’s climate change debate, however, is a different story. Brown’s
election narrows the already slim chance of corralling enough Democrats to
approve an emissions-cutting bill opposed by fossil-fuel industries.
The promise of billion-dollar grants for local clean transport
programs, which was included in the Senate environment committee’s
bill, may well be lost for the time being.

What is possible on the environmental front? An "energy-only" bill that includes a renewable electricity standard has a stronger chance
of winning a Senate majority, and a Green Bank-type proposal focused on
leveraging private-sector money for transportation projects is still in the mix.

The
biggest question mark, then, is whether the Obama administration will
follow through on its intention to curb pollution through the
Environmental Protection Agency (EPA) if Congress fails to pass
legislation. The EPA’s air-quality chief suggested
last week the agency is on track, but a collapse of the White House’s
top priority — health care — could throw a wrench into the works.

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Enviro Group Sees State DOTs’ Transport Predictions — and Raises Them

Just before New Year’s, the American Association of State Highway and
Transportation Officials (AASHTO), the Washington voice for state DOTs
that’s often dubbed the "road lobby," counted down 10 hot topics for 2010.

freight_rail.jpgFreight upgrades made EDF’s transport wish list for 2010. (Photo: TSA)

Most items on AASHTO’s list are awaited with equal fervor by green groups and transit advocates, such as new high-speed rail grants and a congressional jobs bill — but most state DOTs are unlikely to see eye to eye with transport reformers on the big issues, to put it mildly.

With that in mind, perhaps, the Environmental Defense Fund (EDF) today released its own top 10 transportation to-dos.

The
entire list is worth reading in full, while remembering that many of
EDF’s preferred changes have the best chance of becoming law if
Congress moves forward with a new six-year transportation bill before
the midterm elections. Two goals on the list are notable because they
often get short shrift in the larger debate:

  • Modernized, cleaner freight: Funding for a freight system that is efficient and provides environmental benefits. Our freight system is expected to grow 80% in the next 10 years, and we need solutions to reduce pollution and congestion. …
  • Pay-as-you-drive insurance: Let’s incentivize reduced VMT and get PAYD in every state, so drivers can opt for an insurance policy that best reflects their lifestyle.

PAYD is undergoing a pivotal test run in California, where Damien Newton found
environmental advocates sorely disappointed with the fine print of new
insurance rules. It’ll be interesting to see whether Congress adds
incentives for better state-based PAYD options to the next long-term
transport bill … when it emerges.

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EPA Air Chief: We Need to Do More to Reduce VMT

Obama administration officials "need to align together" to work on
reducing the nation’s total vehicle miles traveled — work that should
go beyond a pending congressional climate bill — the Environmental
Protection Agency’s (EPA) air-quality chief said today.

GinaMcCarthy.jpgGina McCarthy, EPA’s top air pollution regulator. (Photo: CECE)

Gina McCarthy, EPA’s assistant administrator for air and radiation, acknowledged in a speech at EMBARQ‘s transportation conference that her agency as "less effective" working alone on crafting strategies to cut VMT.

McCarthy
called for federal agencies to work together on a coordinated approach
to transportation policy that makes economic and environmental factors
an essential part of the mix.

"When we say transportation, everybody thinks ‘car’,"
McCarthy said. "That’s a challenge for us as individuals, as a society
– and clearly it’s a challenge for me, as someone who’s supposed to
deliver clean air to breathe."

McCarthy
described lowering VMT as the third leg of the EPA’s transport stool.
The other two, she explained, are encouraging vehicle technology to
reduce emissions and promoting cleaner-burning fuels.

But
that third leg drew the bulk of McCarthy’s attention, as she echoed the
mission statement of the White House’s inter-agency "livable
communities" effort.

"Transportation, above all else, needs to be looked at through a series of complementary
measures, beyond cap-and-trade, in order to drive the types of reductions we need in order
to live in a sustainable world," said McCarthy, a veteran environmental regulator in Connecticut.

And McCarthy appeared to recognize the existing federal
system’s built-in bias toward transportation projects that make life
difficult for air-quality regulators. "The easiest way to spend large
hunks of money is to widen a road," she said. "The worst way to spend
large hunks of money is to widen a road."

As
for the cap-and-trade bill, which faces an uncertain future thanks to
resistance from red-state Senate Democrats, McCarthy warned Congress
that her agency is acting under a Supreme Court mandate to curb greenhouse gases: "Though we support cap-and-trade … EPA is going to do what the law says and what the science says."

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Should a Climate Bill Even Try to Fight Sprawl?

The potential for a cap-and-trade climate bill to set aside significant
amounts of money for reforming local land use and transportation
planning is often touted by Democrats, environmental groups, and this particular Streetsblogger.

sb375.jpgShould
the approach California used in SB 375 (being signed into law above) be
applied to a congressional cap-and-trade climate bill? (Photo: EcoVote)

But what does Mary Nichols,
chair of the California Air Resources Board and administrator of the
state’s landmark effort to cut emissions by changing development
patterns, think of the idea of tackling sprawl via climate legislation?

"I don’t necessarily think SB 375
[the California land-use bill] should be in a cap-and-trade bill,"
Nichols said today during a session of today’s Transportation Research
Board (TRB) conference devoted to climate change.

The
provocative question of how important a congressional climate bill
would be to transportation was first raised by EMBARQ program director Nancy Kete, a veteran sustainability advocate.

Asking
the TRB audience to consider that "whatever happens on climate change
really is not going to have much impact on transportation," Kete
praised the climate bill’s grants for transit and land-use planning but described them as unsuitable for achieving "significant, short-term" pollution reduction.

Nichols’
uncertain perspective on the path to addressing transportation — which
produces 40 percent of California’s emissions and 30 percent of total
U.S. CO2 — through climate legislation may surprise some, but it
tracks with what she described as an "unsettled" political climate
surrounding the issue of pollution limits.

Indeed, Nichols’
remarks today emphasized the importance of a federal climate plan that
did not attempt to preempt the regulations of individual states, and
California is one of several seeking a go-slow approach to greenhouse gas restrictions from the Environmental Protection Agency (EPA).

So if climate change legislation, which faces
considerable resistance from Senate Democrats, isn’t the vehicle to
begin remodeling the nation’s transportation planning system, what is?
Kete proposed a shift in focus to the six-year federal transport bill
– though its political future is as murky as the climate measure’s.

Yet Kete’s suggestion brought a telling remark from John Stoody, an aide to conservative GOP senator Kit Bond (MO).

Read more…

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A Step Towards Pricing of Pollution? 11 States Back Low-Carbon Fuel Rules

While many in Washington spent their holiday breaks wondering if Senate Democratic opposition would deal a major blow to progress on a climate change bill, 11 northeastern governors were agreeing on a deal that suggests otherwise.

The
11 governors vowed to develop a shared low-carbon fuel standard (LCFS)
that would cut the total "life-cycle" emissions from transportation
fuels.  That measure would include the indirect environmental harm
caused by biofuels’ adverse land-use effects as well as the direct consequences of burning conventional gas.

The process is not going to be easy, or quick — the states’ pact
mentions only that a "regional framework" for the standard would be
established by 2011. But the governors’ deal is a sign that amid
uncertain prospects for congressional action on carbon emissions caps,
states are emerging as laboratories for new approaches to curbing
pollution.

Even an LCFS that allows fuel producers to select
their own method of pollution reduction and measures emissions on a
per-gallon basis, as recommended
by the Union of Concerned Scientists, would not be a substitute for
climate legislation that seeks to put a fair price on carbon.

What
an LCFS can do is put electrified rail and other forms of transit on a
more competitive footing by encouraging gas and diesel prices that
reflect the full environmental toll taken by the burning of fossil
fuels. As the California High Speed Rail Blog observed in its analysis of that state’s LCFS — which is expected to serve as a model for the 11 northeastern states:

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Senate Climate Bill Invests Big in Transit, Reaps Big Deficit Reduction

As the Copenhagen climate talks reach a turning point,
congressional negotiations over emissions cuts are taking a back seat
to global debate. But some undeniably good news on the domestic front
came late yesterday from the nonpartisan Congressional Budget Office
(CBO).

Sen_John_Kerry_Discusses_Partnership_China_NaObORtZBHul.jpgSen. John Kerry (D-MA) described the Copenhagen talks this week as a motivator for Senate climate action. (Photo: Getty)

The CBO found that the Senate environment committee’s climate bill, which would nearly triple
the House’s investment in clean transportation, would decrease the
federal deficit by "about $21 billion" during its first 10 years and
result in net spending decreases even after that point.

Environment panel chairman Barbara Boxer (D-CA) was elated by the CBO’s report [PDF],
which also attached a $16 billion estimate to the bill’s 10-year
funding for transit, land use, bike-ped infrastructure and other green
transport.

Boxer said in a statement:

The CBO score shows that there is a way to design a clean
energy and climate bill that is fiscally responsible and gets the job done
– while protecting the health of our families and the planet.

But unfortunately, the money-saving news may not be enough to save the environment committee’s framework, which sparked a GOP boycott and fears that moderate Democrats from coal-dominant states would ultimately withhold their votes.

Boxer’s
co-sponsor on the climate bill, Sen. John Kerry (D-MA), is separately
working with Sens. Lindsey Graham (R-SC) and Joseph Lieberman (I-CT) on
a compromise climate proposal aimed at winning 60 votes in the upper
chamber of Congress.

That bill is expected to include new
subsidies for nuclear power as well as an emissions cap lower than the
environment panel’s version. Whether it maintains a respectable level
of support for clean transportation remains to be seen.

Meanwhile, Boxer’s GOP counterpart on the committee, Sen. Jim Inhofe (OK), stopped in Copenhagen for just two hours today to crow that a U.S. climate bill has "zero" chance of winning congressional passage.